Rhee Chang-yong, the Governor of the Bank of Korea, emphasized that they do not have any plans ahead of the US and European countries regarding central bank digital currency (CBDC). He stated that there are very few benefits in launching CBDC early in the market and they have decided to adapt to international developments.
Speaking at the CBDC seminar, Rhee Chang-yong said that launching CBDC before global leaders would not be beneficial for South Korea. Although the country has made significant efforts in CBDC research and development, timing is believed to be critical.
As a result, the Bank of Korea will postpone the launch of CBDC until the US and European countries take action. This decision, based on a strategic approach, offers South Korea the opportunity to observe the experiences of leading economies and learn from them.
South Korea plans to conduct pilot tests where citizens can experience CBDC through coupons. Approximately 100,000 people will test CBDC using public coupons in the fourth quarter of 2024. These coupons will be provided by the government and local authorities and will serve as digital coupons in the retail sector by converting them into digital deposit certificates (CD) by banks.
While South Korea’s crypto ecosystem is evolving, the government has implemented a supportive regulatory framework. Despite the tightening measures taken after the Terra-LUNA crisis in 2022, the government continues to encourage a favorable environment for the crypto industry. South Korea’s participation in CBDC and various pilot initiatives demonstrates its ability to strike a balance between innovation and prudent financial practices.